2008-10-27

Collapse - temporary, permanent or...?

Is society going to collapse? Dave leant me a book titled "Collapse of complex societies" which was quite interesting.

But it is unlikely. Why? Because even if the current economic crisis is the worst on record, history shows that we have recovered from them. The 19th century is replete with economic collapses. In fact, part of our knowledge of how/why economic collapses occur is due, in part, to the 19th century experiences we have had. Heck, we even survived the great depression... though not unscathed for the generation that endured it.

Yet complex societies have collapsed in the past. The fact that this has happened in the past means that it can certainly happen again. I'm not talking here about Rome either, which took centuries to fall apart (Rome wasn't destroyed in a day). There is plenty of evidence from the past that complex societies simply... stopped.

But even if we collapse and turn into Mad Max Waterworld The Postman, the evidence suggests that we will eventually reform again and complex societies evolve again (the "Dark Ages" were not permanent).

So... be happy. Even if we go Mad Max, the world will eventually rebalance itself again. It might take 1000 or more years to do this though...

See Wikipedia: Societal Collapse.

2 comments:

Noni Mausa said...

I have been looking at the bubbles over the past century and, though I am no economist, it doesn't look to me like a series of collapses. It looks to me like the expansions and contractions of a great pump.

Certainly, the granddaddy of all bubbles, the South Sea, functioned to move the national debt into the pockets of the middle and lower class and off the account sheets of the Bank of England and the nation. Was this intentional? Maybe not, but perhaps it didn't need to be -- any more than the stochastic movement of an amoeba is intentional.

God knows this last eight to 15 years has functioned to liquefy and extract any spare wealth the US middle and lower classes may have had laying around. The noise we hear now (see this Angry Bear post: http://angrybear.blogspot.com/2008/10/draining-401k-pool-of-money.html) is the sound of the last droplets of milkshake being sucked out of American pockets as Bush heads towards the door.

I see the process as a) artificial liquidity inflates the market, inducing b) owners of real wealth to invest it in the market in larger and larger amounts, c) the real wealth is extracted from the large pool, before d) the pool is allowed to collapse again, providing a handy excuse for why the owners in (b) no longer have any wealth.

The overall effect, over quite a long time-span (decades) is to retroactively reduce the effective pay scale and political strength of the working class, while increasing, at least by comparison, both quantities in the investment class.

True, it is a process which lasts a long long time, but with offshoring of assets, and the removal of inheritance taxes from the law, it is a process that ratchets only higher, never lower.

Noni

Sam Norton said...

The Tainter book? I'm not sure you'd write that if you had read it...